As a NRI, you may not have been required to file tax returns in India over the years. But, if you are planning to or have sold a property in India, then filing your tax returns is an essential step in the process of sale and repatriation of funds. Due taxes must be paid before repatriation of sale proceeds out of India. To file your tax returns, you will need to:
- Determine tax liability by computing capital gain/ loss earned/ incurred on sale of property.
- Declare tax saving investments made, if any, out of proceeds of sale.
- Claim TDS deducted by the buyer of the property .
- Declare and pay the balance tax liability, if any, or claim a refund of tax, as the case may be.
- Declare any other sources of income and pay tax liability arising thereon – this could include, salary, rental income, interest or dividends, or capital gains on sale of a capital asset other than property.
The fiscal year of India is from 1st April to 31st March and the due date for filing returns is 31st July following the year end. For example, if the property is sold in December 2018, it falls in the Financial year 2018-19 i.e. from 1st April 2018 to 31st March 2019. Then, the Indian Income tax return will have to be filed by 31st July 2019.
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If you have sold or are planning to sell a property in India, you may want to repatriate the sale proceeds to the country of your residence. In order to do so, the banker require a certificate issued by a Chartered Accountant in Form 15CA and 15CB. Form 15CB is a certificate issued and digitally signed by a Chartered Accountant which states that due taxes have been deducted and paid on the sums being repatriated. Form 15CA is a declaration by the remitter of funds.
For repatriation of funds, bankers require certification called the 15CA and 15CB forms.
The 15CB is a certificate issued and digitally signed by a Chartered Accountant and the 15CA is a declaration by the remitter of funds.
The repatriation of funds involve the following procedures:
- Audit of Documents
- Analysis of source of Documents
- Preparation of 15ca and 15cb certificates
Capital gain is the profit or gain that arises on the sale of a capital asset. According to the Income tax Act, 1961, Capital Gain is chargeable to tax in the year of transfer. Hence, Understanding the provisions of the Act is crucial to determine the capital gain and the tax liability.
Know your tax liability resulting from sale of property in India. Getting to know the quantum of capital gain/ loss and tax liability thereon is the first step to tax planning for property sale. Calculating capital gain allows you to understand whether to repatriate the proceeds on sale or re-invest the same in tax saving investments or a choose a combination of both. Further, being a NRI, you will have tax implications on capital gain from sale of Indian assets even in the Country where you are resident. Through this service, you will know your tax liability in India and be in a position to undertake tax planning in India and abroad.
